In a significant shift aimed at enhancing market competitiveness and addressing shareholder concerns, PepsiCo has announced plans to cut prices and streamline its product lineup as part of a strategy influenced by activist investor Elliott Investment Management. Based in Purchase, New York, PepsiCo, known for its popular Frito-Lay snacks and beverages, will reduce nearly 20% of its product offerings by early next year.
The company did not specify which products would be eliminated or provide details on the exact pricing adjustments. However, PepsiCo emphasized that the savings generated from these reductions will be reinvested into marketing efforts and initiatives designed to provide better value for consumers. Among the new offerings on the horizon are healthier options featuring simpler ingredients, such as Doritos Protein and Simply NKD Cheetos and Doritos, which will be free of artificial flavors and colors. Additionally, PepsiCo has recently debuted a prebiotic version of its signature cola.
This move comes in the wake of a $4 billion investment from Elliott, which acquired a stake in the company last September. In a letter to PepsiCo’s board, Elliott highlighted concerns surrounding the company’s lack of strategic direction, declining growth rates, and diminishing profitability within its North American food and beverage sectors.
Elliott Partner Marc Steinberg expressed confidence in PepsiCo’s potential to deliver shareholder value through the newly announced strategy. He praised the collaborative relationship with PepsiCo’s management and acknowledged their commitment to implementing significant changes aimed at enhancing both revenue and profit growth.
PepsiCo has signaled its intention to maintain close collaboration with Elliott as it embarks on these transformative changes. In after-hours trading following the announcement, PepsiCo’s shares showed minimal movement. The company has set an organic revenue growth target of 2% to 4% for 2026, despite reporting a modest 1.5% growth in organic revenue during the first three quarters of this year.
Further, PepsiCo outlined a commitment to review its supply chain processes and make board-level changes aimed at attracting global leaders who can support its growth and profitability aspirations. Chairman and CEO Ramon Laguarta expressed optimism regarding the urgency and effectiveness of the initiatives being implemented to enhance both market presence and financial performance.
Earlier in the year, PepsiCo acknowledged that consecutive years of double-digit price increases, coupled with shifting consumer preferences, have contributed to weakened demand for its beverages and snacks. In July, the company indicated its efforts to counteract customer perception of high prices by increasing the distribution of value-oriented brands like Chester’s and Santitas.
As these changes unfold, the industry will be watching closely to see how PepsiCo navigates the challenges ahead and seeks to reclaim its position in the competitive food and beverage market.
